Robinhood vs. the Options – NerdWallet

For some, Robinhood is synonymous with “funding app.” When the corporate began providing free trades in 2015, it had an unlimited benefit over most main brokerages that had been charging clients for each commerce. Nevertheless, Robinhood’s opponents rapidly adopted swimsuit, and in the present day commission-free buying and selling is customary, not particular.

And whereas Robinhood stays the face of the person investor motion — and it continues to attain effectively on person expertise and low prices in our evaluation of on-line brokerages — different brokers and funding apps surpass Robinhood in different areas and will match instead or supplemental funding account.

In terms of discovering a dealer that’s best for you, the hot button is figuring out what your funding objectives are and discovering a dealer that may assist you meet them.

Robinhood overview

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Robinhood has been credited for bringing about an unlimited change within the brokerage business: eliminating commerce commissions. The app gives a modern, straightforward method to commerce shares, choices, exchange-traded funds and cryptocurrency, and has been often unveiling new merchandise. Most not too long ago, Robinhood added fractional shares, computerized contributions and even IPO entry to its choices.

Nevertheless, Robinhood has additionally been the main focus of complaints from the Securities and Change Fee, lawsuits and public outrage over a few of its practices. In June 2021, the corporate paid almost $70 million in fines and restitution — the biggest monetary penalty ever levied by the Monetary Business Regulatory Authority.

$0 for brokerage account and for Robinhood Gold account; $2,000 for a margin account (regulatory minimal).

Account charges (annual, switch, closing, inactivity)

No annual, inactivity or ACH switch charges. $75 ACAT outgoing switch price. (Robinhood Gold prices $5 a month.)

• American Depositary Receipts for over 250 international firms.

Variety of commission-free ETFs

All obtainable ETFs commerce commission-free.

Variety of no-transaction-fee mutual funds

Internet platform is purposely easy however meets fundamental investor wants.

Cell buying and selling platform consists of customizable alerts, information feed, candlestick charts and skill to hear reside to earnings calls.

Information obtainable from WSJ Markets, Reuters, Barron’s, CNBC Enterprise and Cheddar. Gold members have entry to analysis from Morningstar, Nasdaq, Nasdaq Totalview degree II Market Knowledge for a further $5 monthly.

Buyer help choices (consists of web site transparency)

Beneath are 5 comparisons discussing how Robinhood’s opponents stack up in numerous classes.

Options to Robinhood

For rookies: Constancy

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Constancy could also be one of many largest brokerages within the nation — it manages an astounding $10.4 trillion in belongings — however that does not imply it’s too large for newbie buyers. The brokerage tops our listing of one of the best brokerages for rookies as a result of it gives a complete brokerage service that grows with you as your funding wants evolve.

Nevertheless, you received’t discover cryptocurrencies at Constancy, nor the trimmed-down, modern person expertise Robinhood customers have come to like.

No base fee; $0.65 per contract.

Account charges (annual, switch, closing, inactivity)

Variety of commission-free ETFs

All ETFs commerce commission-free.

Variety of no-transaction-fee mutual funds

Greater than 3,400 no-transaction-fee mutual funds. and Energetic Dealer Professional. Each free for all clients.

Accessible for iOS and Android; superior options.

Buyer help choices (consists of web site transparency)

Cellphone, e-mail and reside chat 24/7; 200 native branches.

Amongst funding apps: Acorns

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For those who’re dedicated to utilizing a mobile-first funding app like Robinhood however are questioning what else is on the market, Acorns ranks second on our listing of the finest funding apps (simply behind Constancy). Nevertheless, Acorns is a really completely different product from Robinhood; it’s largely geared towards long-term savers. It’s half robo-advisor, half financial savings account, half full-service brokerage, and gives three tiers of service for 3 completely different flat month-to-month charges.

One in all its signature choices, although, is its round-ups: Use an Acorns debit card (or one other linked card) for on a regular basis purchases, and Acorns will “spherical up” the change and mechanically make investments it for you.

For those who’re trying to put money into particular person shares, although, Robinhood could be the better option. With Acorns, your solely choice is to put money into preset portfolios, which the app will assist you select based mostly in your danger tolerance. To make certain, these diversified portfolios are a accountable method to make investments long-term, however you received’t have the identical investing expertise and freedom as you could have with Robinhood.

$0 to open account; $5 required to begin investing.

  • Lite: $1 a month for taxable funding account.

  • Private: $3 a month for an funding account plus an IRA and a checking account.

  • Household: $5 a month for the entire above plus funding accounts for teenagers.

Funding expense ratios

Account charges (annual, switch, closing)

$50 per ETF to have them transferred to a different dealer while you shut your taxable Acorns account; no cost to promote your investments and have the ensuing money transferred.

Portfolio combine is mostly well-diversified however lacks vital publicity to worldwide bonds.

Sustainable portfolio obtainable at no cost.

Socially accountable portfolio choices

Sustainable portfolio constructed with ESG ETFs obtainable for no further value.

  • Particular person non-retirement accounts.

  • Roth, conventional and SEP IRAs.

  • UTMA/UGMA accounts for teenagers.

Checking account/money administration account

Private and Relations get entry to Acorns Spend, a checking account with a debit card, cell test deposit and reimbursed ATM charges.

Buyer help choices (consists of web site transparency)

Customer support is offered daily from 6:00 a.m. to 7:00 pm PST by telephone and e-mail help.

For crypto: Gemini

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For those who’re utilizing Robinhood to commerce cryptocurrencies, it’s necessary to know that at the moment, the app has very restricted performance. With Robinhood, you don’t have entry to your crypto pockets, which means you received’t be capable of ship or obtain the cash you buy. Cryptocurrency buying and selling on Robinhood nonetheless appears like an afterthought; the app’s major focus continues to be straightforward, free inventory buying and selling, not cryptocurrencies. Gemini, then again, is all about cryptocurrencies, and also you’ll discover you could have way more management over the cash you purchase. For instance, you’ll be able to ship and obtain cash straight out of your Gemini pockets, be part of liquidity swimming pools that provide a hard and fast rate of interest and discover different decentralized finance purposes.

Nevertheless, if it’s solely worth appreciation you’re on the lookout for in crypto — and also you’re OK selecting from a restricted choice — Robinhood nonetheless could be the better option. Crypto buying and selling by Robinhood is totally free, whereas Gemini’s charges are comparatively excessive.

0.00001 bitcoin/ 0.001 ether.

Buying and selling and transaction charges

As much as 1.49% relying on buying and selling platform; 3.49% for debit card purchases. Different charges might apply.

Variety of cryptocurrencies

Crypto-to-crypto buying and selling pairs

Most info simply discovered on the web site.

Can use your personal digital pockets?

Two extremely rated apps for iOS and Android.

For retirement financial savings: Charles Schwab

Charles Schwab
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Retirement might really feel like a good distance away, however probably the most necessary components in increase retirement financial savings is definitely time itself. So, in the event you’ve received plenty of time and the flexibility to place away at the least a bit cash for retirement, you might be in an awesome place to begin investing long-term.

Nevertheless, Robinhood at the moment solely gives a taxable brokerage account. In terms of retirement financial savings, there are significantly better account sorts (akin to particular person retirement accounts) that provide worthwhile tax advantages. And Charles Schwab is a pacesetter on this area.

Much like Constancy, Charles Schwab is large, managing almost $6.7 trillion in belongings as of the tip of 2020. However don’t let that intimidate you. Charles Schwab is one in every of many main brokerages which have saved tempo with the evolving fintech area, providing a extremely rated app, commission-free inventory, choices and ETF trades and fractional shares of S&P 500 firms.

However simply since you’re funding a retirement account doesn’t imply you’ll be able to’t complement your long-term financial savings with a taxable brokerage account like what Robinhood gives. There’s one thing to be mentioned for Robinhood’s simplicity, and when you’ve arrange and funded a retirement account, Robinhood should still be an acceptable method to dabble in inventory buying and selling exterior of your core portfolio.

No base fee; $0.65 per contract.

Account charges (annual, switch, closing, inactivity)

No annual or inactivity price; $50 for full switch out of belongings; $25 for partial switch of belongings.

Variety of commission-free ETFs

All ETFs commerce commission-free.

Variety of no-transaction-fee mutual funds

Over 4,300 no-transaction-fee mutual funds.

Three platforms supplied with no commerce minimums or charges: StreetSmart Edge (desktop platform), and StreetSmart Central.

Two cell apps with above-average capabilities: Schwab Cell and StreetSmart Cell.

Analysis from 14 suppliers together with Moody’s, Morningstar, Recognia, Credit score Suisse and Thompson Reuters, plus extra in-house generated commentary and instruments.

Buyer help choices (consists of web site transparency)

Cellphone, e-mail, chat 24/7 in individual help obtainable at branches M-F 8am to 5pm. Some branches have Saturday hours.

For general similarity: Webull

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Webull is a relative newcomer, however has rapidly earned a spot as an alternative choice to Robinhood due to how related the 2 are. Webull is simple to make use of, modern on cell and gives free trades on shares, choices and cryptocurrency, very similar to Robinhood. The truth is, it’s exhausting to discover a brokerage that beats both Robinhood or Webull on value. Nevertheless, Webull gives instruments intermediate and superior merchants might admire, however received’t discover on Robinhood.

That mentioned, Robinhood’s simplicity is a big a part of its attraction. For those who’re contemplating utilizing Webull instead, you will have a little bit of a studying curve as you make your manner across the new instruments, charts and general expertise. What’s extra, Robinhood good points an edge over Webull relating to IPOs. With its new IPO Entry function, retail buyers have the prospect to purchase into IPOs earlier than they begin buying and selling available on the market.

Account charges (annual, switch, closing, inactivity)

No annual or inactivity charges; $75 full/partial switch price.

Variety of commission-free ETFs

A whole bunch of ETFs commerce commission-free.

Variety of no-transaction-fee mutual funds

Browser-based and downloadable desktop platforms obtainable with superior charts, indicators, screeners and customization.

Cell app gives superior options together with charts and indicators, paper buying and selling, worth alerts and voice command.

Information, analysis and evaluation obtainable from Nasdaq Totalview, Thomson Reuters, Refinitiv, Lipper, OPRA (real-time quotes obtainable free with a number of choices trades monthly), OTC Bulletin Board

Buyer help choices (consists of web site transparency)

24/7 telephone and e-mail, chat obtainable in cell app.


A news media journalist always on the go, I've been published in major publications including VICE, The Atlantic, and TIME.

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